Last year saw the highest ever number of cases of fraudulent conduct recorded to the database run by Cifas, the UK fraud prevention trade association.
In 2019 there were 364,643 cases recorded to the database – that’s a 13 per cent rise when compared to 2018. Cifas reports three areas of the greatest rise – identity fraud, misuse of facility and facility takeover, which all recorded the highest cases over the last five years.
Identity fraud rose by nearly 20pc in 2019, accounting for the largest number of cases recorded by Cifas members at 61pc. People aged over 31 were specifically targeted by this type of fraudulent conduct, with victims aged 60 and over on the rise. The highest number of victims (68pc) were recorded in the South East region.
Cases categorised as misuse of facility accounted for nearly a quarter of all cases recorded on the database, and this type of activity grew by 64pc over the last five years. Bank accounts were specifically targeted, with behaviours associated with money muling accounting for nearly three-quarter of these cases. Young people were particularly vulnerable to this type of activity, with 62pc of cases bearing the hallmarks of money mule activity involving young people under the age of 30. London recorded the highest levels of this type of activity, and this was followed by the West Midlands region which saw the most significant rise in cases.
Facility takeover reached the highest level ever in 2019 – up 105pc over the past five years, with this type of conduct accounting for nearly one in ten of all the cases on the database. The majority of victims were aged between 41 and 50, with this age group seeing a 43pc increase in cases last year when compared to 2018. In terms of products, telecom products were the most targeted, accounting for over half of all the cases recorded to the database in 2019. However it was online retail that saw one of the most significant rises in cases – 3,815 cases in 2019 compared to 1,903 in 2018, marking a 100pc increase. The largest number of victims of facility takeover live in the London and South West regions.
As for fraudsters’ use of technology, 87pc of identity fraud in 2019 was through online channels. Details are mostly obtained through smishing and phishing attacks, where victims are tricked into giving personal and financial information believing that they were being contacted by legitimate organisations. Spoofing of websites of well-known brands was also a theme, whereby a website is made to look like a known service provider to obtain personal details.
Nick Downing, Chief Intelligence Officer for Cifas, said: ‘The steady increase in fraudulent conduct over the last few years provides us with a stark warning that we must start taking this threat seriously. We all need to take a step back and consider how we can change our behaviours. Businesses must look to how they can better safeguard their systems and protect their customer’s data, and individuals need to be constantly vigilant of fraudsters trying to steal their personal and financial information.
‘We know that the COVID pandemic created new opportunities for criminals to steal money and information, and my concern is that the current economic uncertainty will fuel fraudulent activity even further. If we don’t take action now, then without doubt, the high levels of fraudulent conduct we are currently seeing will just be the tip of the iceberg when compared to the coming year.’
Comment
Keith McGill, Head of Fraud and ID at the credit checking agency Equifax UK, said: “With a 13pc rise in reports to the National Fraud Database from 2018, it’s clear that even before the pandemic struck there were a number of challenges for individuals and businesses to stay a step ahead of fraudsters.
“With a doubling of online retail facility takeovers in 2019 from the previous year, we can expect this figure to grow once again in 2020 as companies have fast-tracked digital and online solutions to maintain customers and revenues during lockdown. In cases where this move to technology is unfamiliar and rushed, fraudsters will undoubtedly find opportunities to take advantage.
“According to the research, 87pc of identity theft came via online channels in 2019, reinforcing the importance now more than ever for companies to ensure they have robust and secure controls in place for processes such as customer identification and on-boarding. In this time of heightened online activity and risk, it’s also crucial for individuals to take greater care with their online security and personal details.
“Despite the trends outlined in the report, there is light at the end of the tunnel. The pandemic has forced businesses to accelerate their online presence and digital transformation. Many are using this as an opportunity to embrace the latest technologies, and for those without legacy systems they are able to introduce cutting-edge services and security from the outset.
“Consumer confidence, coupled with more effective digital identification and security measures, will ultimately benefit the reputation and longer-term strength of companies committed to making the change. For those who are slow to react, COVID-19 is likely to speed up their decline as the world moves to a digital future.”
